Rosneft Head Igor Sechin Speaks about Sanctions and Ukraine

Igor Sechin, head of the oil giant Rosneft, is considered by many to be the second most powerful man in Russia. In an interview, he speaks with SPIEGEL about natural gas deliveries to Europe, the Ukraine crisis and the damage caused by economic sanctions.

AFP

The Kremlin is reflected in a plaque at the entrance of the state-owned oil company Rosneft, located across the Moscow River.

His adversaries refer to him as Darth Vader; his admirers call him the energy czar. His power, though, is uncontested. And Igor Sechin, the director of Rosneft, the world's largest listed oil company, is also reclusive. He only seldom appears before the public and the press.

But when Sechin, 53, enters the room for his interview with SPIEGEL, he is in a cheerful mood, immediately handing over his business card which reads: "No Name, No Company, No Address."

The text on the card is his commentary on the sanctions imposed by the West on Russia and on leading figures in the country, such as Sechin himself. He is no longer permitted to travel to the US and Sechin has become persona non grata in the West due to the ongoing war in Ukraine.

A thickset man with a degree in Romance languages, Sechin is considered to be one of the most powerful people behind Russian President Vladimir Putin in the complicated Kremlin power structures. The two have known each other since the 1990s, having worked together at the time in the St. Petersburg city government. As Putin rose to power, he pulled Sechin up with him, first as deputy chief of staff during Putin's first stint as president and then as deputy prime minister.

Within a decade, Sechin created a company that controls more oil and natural gas reserves than the energy giant ExxonMobil. Each day, Rosneft produces 4.2 million barrels of oil, almost 5 percent of global consumption. The company's headquarters, a Czarist palace across the Moscow River from the Kremlin, make Rosneft's place in the Russian hierarchy clear. Behind the facade, though, the image is far less pompous, with cafeteria odors wafting through white-tiled hallways and offices numbered like rooms in a cheap hotel.

A map of all of Rosneft's drill sites in the former Soviet Union hangs on the wall of the conference room. The trapezoidal conference table narrows at one end, where a green leather armchair occupies the place of honor. Sechin, though, chooses a less ostentatious perch.

SPIEGEL: Igor Ivanovich, the US government has placed you on the sanctions list and has blocked Rosneft from receiving oil drilling technology from the West. How bothered are you by the fact that you are no longer welcome in the US and Europe?

Yuri Kozyrev/ NOOR/ DER SPIEGEL

Rosneft president Igor Sechin at his office at the time of his SPIEGEL Interview.

Sechin: Neither I nor my company have anything to do with the crisis in Ukraine. As such, there is no foundation for the sanctions against me and Rosneft. They represent a violation of international law. Rosneft is an international corporation with stockholders in America, Europe and Asia. After the Russian state, BP is our biggest stakeholder with a 20 percent holding. As such, the sanctions also affect our Western partners. I find it curious that Rosneft is on this list even though we work more closely together with American and European companies than any other Russian firm.

SPIEGEL: How painful are the sanctions against Rosneft and Russia?

Sechin: The oil reserves that we are able to tap with the means available to us today are enough for 20 years. The sanctions will not prevent us from fulfilling our supply contracts. The technology affected by the sanctions is related to future projects. Incidentally, I would like to quote an expert. Juan Zarate, who was an advisor to President George W. Bush, writes in his book "Treasury's War" that America is waging a new kind of war. It is being waged without military attacks, preferring instead to make opponents suffer financially.

SPIEGEL: Are you trying to say that America has declared such a war on Russia in response to the Ukraine conflict?

Sechin: I'm just quoting him. Early on, the American geostrategist Zbigniew Brzezinski warned Europe against turning to Moscow. He was referring to the natural gas pipeline deals between Russia and Germany. He wrote that the US should not tolerate a geopolitically united Europe that might challenge America. That would happen, he wrote, were Europeans to realize that Russia is their natural economic partner.

SPIEGEL: Despite the war in eastern Ukraine and the sanctions, Russian-American economic relations when it comes to oil seem to be quite good. Rosneft and the American concern ExxonMobil just opened an oil platform together in the Arctic. President Vladimir Putin even took part in the ceremonies via video link.

Sechin: We have enjoyed working together with Exxon for 20 years -- and now with the northernmost oil platform in the world. We believe that there is as much oil there as Saudi Arabia has in its proven reserves. We plan to invest $400 billion in the Arctic by 2030. In addition, our platform Berkut, off the coast of Sakhalin Island, has broken a few records. It is the biggest in the world.

SPIEGEL: "Berkut" means "golden eagle." But it was also the name of the special police force then-Ukrainian President Viktor Yanukovych used in his unsuccessful attempt to defeat the Kiev protests.

Sechin: Now you've let the cat out of the bag. You want to talk about Ukraine. For me, though, Rosneft and our strategy is important.

SPIEGEL: As a listed company with the largest oil reserves in the world, you are operating against the background of the crisis. The sanctions have now cut you off from global financial streams. With $46 billion in net debts, how do you plan to finance the immense investments you have planned?

DER SPIEGEL

Graphic: European Union oil and natural gas imports

Sechin: We will be able to easily pay our debts under our own power. Last year, Rosneft achieved a record profit. With a turnover of $80 billion, our profit for the first half of 2014 is $5 billion and it will be $13.5 billion by the end of the year. No Russian company pays as much in taxes as we do. In 2014, our tax bill will be more than $80 billion.

SPIEGEL: Why, then, did you recently request financial assistance from the state?

Sechin: Because we would like to tap into difficult-to-access oil reserves in eastern Siberia and build a refinery there. We would be pleased if the government were to make a bond issue available to us -- I would like to underline that it is not a subsidy. If not, I don't see it as a catastrophe. We'll just complete the project a bit later. Rosneft does not have any financial difficulties.

SPIEGEL: When will the sanctions begin to really hurt Rosneft and Russia?

Sechin: Everyone is suffering under the sanctions. It is a mistake to expand them to companies and bring them into a political conflict. Sanctions are a kind of war. That is how hatred is sown and it produces vengefulness.

SPIEGEL: The sanctions target Rosneft because you are seen as a close ally of Putin's. America is seeking to exert pressure on the president.

Sechin: Then the West doesn't know Russia's president very well. Putin will not allow himself to be pressured.

SPIEGEL: Have you offered the president any advice regarding Ukraine?

Sechin: The president makes his decisions by himself. It is absurd to believe that I have any influence over him. My relationship with Putin is also not such that I could approach him with such questions. The idea is just as absurd as placing me on the sanctions list.

SPIEGEL: You spoke of the vengefulness that becomes an element in economic warfare. Is there a possibility that Europeans might find themselves sitting in cold houses this winter because Russia has shut off deliveries of natural gas and oil?

Sechin: Everyone ends up sitting where they want to. But don't worry, only the uninformed could believe such a thing were possible. Rosneft and other Russian companies will adhere strictly to their supply contracts, which are safeguarded by credits and contractual penalties. That is why contracts exist. As an internationally traded company, Rosneft is listed on the London Stock Exchange and adheres to its standards.

SPIEGEL: Are you concerned that Europe might buy less of its oil and natural gas from Russia in the future?

Sechin: Just like every customer, Europe has the right to decide on its own. But Europe has an advantage over competitors in that it can rely on cheap Russian energy reserves. Currently, there is a lot of talk about shale gas and other new exploitation technologies. But they would make gas more expensive for European consumers. I am sure of that. Ignoring advantages is irrational.

SPIEGEL: Has your cooperation with German companies like Siemens been negatively affected by the sanctions?

Sechin: No, the gas turbines and control systems that we buy do not fall under the resolutions. But in the first half of this year, our imports of technology from Germany as a whole have sunk by 15 percent. Nevertheless, there isn't a deficit of such machinery in Russia. American and Asian companies have been more than happy to fill the void. Certainly, Germany produces quality drilling rigs and pipeline systems. But if Germany doesn't want to deliver, we'll just buy in South Korea or China. If Germany's goal is that of preventing its own companies from earning money, then go ahead.

SPIEGEL: At the end of last year, Rosneft closed a $270 billion deal with China. Is Rosneft turning toward Asia?

That was a very enlightening article. First of all the hypocrisy in the world is just mind boggling.
1. america and it's global warming and through mulitlaterial development banks telling them to pass the importance of climate [...]

That was a very enlightening article. First of all the hypocrisy in the world is just mind boggling.
1. america and it's global warming and through mulitlaterial development banks telling them to pass the importance of climate change into their policies.
2. The drilling by Exxon and Rosneft (and others I'm sure) in the artic have an effect of the methane releases from the ocean floor. See Journal Nature Geoscience Nov.24, 2013. Russian researchers Natalia Shakhova and husban Igor Semiletov quote " the seafloor off the coast of Northern Siberia is releasing more than twice the amount of methane as previously estimated."
4. The Rosneft is on the London Stock exchange..1886 the French Rothschild bank, de Rothschield Feres obtained sustantial amounts of Russia's oil fields and forms the Caspian and Black Sea petroleum company. Trostsky worked for the Rothschilds in the oil company during this time.
6. Rockerfellers with their Standard oil also played a role in Russia's oil at that time.
7. Ukraine conflict started with a BAILOUT- bankers are at the helm again. Who owns the london gold exchange and central banks????
Same old story, different players with the exception of one major one which is the "sustainable" one throughout the ages...age of Pisces and age of Aquarius. LOL

green123 09/04/2014

2. European Sanctions...bad business idea

The US/EU partnership on imposing sanctions on Russia reminds me of a fable.. The hen invites the pig for a partnership on an "egg and bacon" deal. The hen says: I lay the eggs. And the pig says What about me? The hen [...]

The US/EU partnership on imposing sanctions on Russia reminds me of a fable.. The hen invites the pig for a partnership on an "egg and bacon" deal. The hen says: I lay the eggs. And the pig says What about me? The hen replies " you are the bacon".

peskyvera 09/04/2014

3.

Didn't the Ukraine conflict started when Yanukovich - democratically elected president, was forced to leave on account up protests, which were instigated by 'F***EU' Nuland et al at a cost of $5 billion? Regime change. The real [...]

Didn't the Ukraine conflict started when Yanukovich - democratically elected president, was forced to leave on account up protests, which were instigated by 'F***EU' Nuland et al at a cost of $5 billion? Regime change. The real problem, for the West, is: Putin refuses to bow to the West - he dares to stand up to it. Good for him.

kasper 09/05/2014

4. Of Global Cooling And Knowing History

Hate to tell Behind the Curtin but Global Cooling is starting to crank up . SunSpots have died off and the Oceans are now cooling quickly .Think of a swimming pool . How fast does the water cool once the weather changes .
This [...]

Hate to tell Behind the Curtin but Global Cooling is starting to crank up . SunSpots have died off and the Oceans are now cooling quickly .Think of a swimming pool . How fast does the water cool once the weather changes .
This cooling is becoming apparent in Australia right now . Low pressure belt has moved north . I live a 500 km above the Tropic of Capricorn and there is a chill in the air when it should be walm . The Sea wind has a cold edge when it should have a walm edge . Global walming was always a hoax , driven by politics and strategy to reorder economic principles so as to cope with the robotization of economies and create jobs for people .
Unfortunately the gods are against the Satanists who are now best by bad luck .As will be Germany if he follows through with Nato's organized attack on Russia , a very cold winter will require a lot of gas.
Igor Sechin is way too smug (at least the english translation gives this impression) about the outcome of proceedings .He imagines everything is being done by some sort of rational economic calibration. He is deluded because he doesn't know the real history of the 20th century but the history the victors created .This puts both himself and Putin at a distinct disadvantage as they are using a false historical past to predict the future .If they don't realize there is a lot more to this than money they are deluded .Wealth & Power does that to people , particularly if there lives have had few serious set backs on there road to the top .They are sure they know whats going on until finally the ground gives way under them . That just a sage warning to know your history and tread gingerly .The west has both a hidden history and hidden technology that helps it bamboozle an adversary. Russia has had such terrible misfortunes I wish the best for its people.

Patrick Z 09/08/2014

5. translation

It's costing us money, especially me personally and my good buddy RasPustin. We are not happy.

It's costing us money, especially me personally and my good buddy RasPustin. We are not happy.